Gold Magazine June - July 2013, Issue 27

INTERVIEW new universities, colleges and research institutes. Regarding Health, Wellness & Sports Tourism, these sectors have received significant attention in recent years and we are working hard on preparing the platform for such interest. The potential is immense and this has been identified by a number of industry experts with vision. Finally, a number of large development and infrastructure projects, such as marinas, golf courses, as well as more integrated development projects including residential, commercial and high-quality educational and health services, are currently available for foreign investment. Gold: How close a watch does CIPA keep on what competing jurisdictions are doing? C.E.A.: CIPA is continuously monitoring competitor activities and especially jurisdictions like Ma lta, Ireland and Luxembourg. It is only natural that competitive jurisdictions will attempt to take advantage of our weak position but the majority of our investors will remain loyal to Cyprus and its hospitality and even find ways to increase their presence due to the new processes and enhanced business environment that will emerge. We are ensuring that we quickly address the needs/problems faced by investors today and make them feel that we are by their side with support and encouragement for the achievement of their goals. Additionally, we continue to promote Cyprus in key markets and ensure that it remains a viable investment destination option for new investors. I personally escorted the President of the Republic during his trip to Israel in May and had various business meetings that focused on future investments among the two countries. Gold: Have you met with President Anastasiades to discuss CIPA’s role in the new government’s strategy? The President of the Republic is placC.E.A.: �� ing great emphasis on attracting investment into Cyprus and boosting the economy. We have already had a few meetings to discuss CIPA’s role and how it fits into the new strategy which is currently evolving. We fully support the efforts of his government to create a modern, competition-driven business environment that is fully aligned with the demands of international business. It is encouraging to see that the President fully understands the importance of foreign direct investments as drivers of growth and the subsequent creation of new jobs which are needed today more than ever. Gold: How significant do you believe the Government’s policy of offering Cypriot citizenship to those investing a minimum amount in the island will be? Are there any indications of its success? Combining investments and citizenC.E.A.: �� ship is a concept that has been adopted by other successful countries such as Canada and Australia. Cyprus has the opportunity to tap into the niche market of investors looking both for a new place to live and do business in. Our EU membership makes Cyprus an attractive destination for Asian-based investors wishing to do business in the EU. We have already seen great interest from Chinese investors who are keen to do just that. Foreigners can take advantage of the recently announced Citizenship Scheme which states that, if they have deposits of a minimum of €3 million for five years in a Cyprus bank, they will be eligible for citizen- CYPRUS HAS THE TRUE POTENTIAL TO BECOME ONE OF THE RICHEST PER CAPITA COUNTRIES IN EUROPE ship. Foreign investors who decide to invest a minimum of €5 million in Cyprus with a variety of activities including the purchase of offices, stocks, companies, etc., will also be eligible for citizenship. There is also a Permanent Residency Permit (PRP) Scheme, which offers permanent residency status to investors acquiring property to the value of at least €300,000. Investors can apply for these schemes provided they meet the specific criteria for obtaining Cypriot citizenship. Gold: There have been a number of highprofile investment projects that have been publicized and then abandoned. I’m thinking specifically about the old Larnaca airport and the land opposite the Hilton Cyprus. Should we learn to keep quiet until deals have been struck? C.E.A.: Keeping quiet until deals have been struck is, of course, considered a Best Practice and this is what experience has taught us. We also believe in communication and transparency throughout the process when there is a possibility of implementing a large project in the country. It is crucial for everyone to understand the importance of such investments and how they will contribute to our economy. We ask that everyone embrace these possibilities with an open mind as opposed to displaying a negative attitude towards them. It is clear that large investments will lead the economic development of the country. Gold: What was your first message to your newly-appointed Board Members and those who will continue to serve? C.E.A.: My message first and foremost was for everyone to roll their sleeves up and get to work on the right things with the right mindset so that we can bring investment growth and success to the island. Our Board has a crucial role in defining the strategy for investments and we must create a vision that will drive the right actions for the creation of a cutting-edge business environment that is attractive to investors. Gold: To an outside observer of Cyprus 12 months ago, the request for a financial assistance package would have come as a great surprise. How would you explain to that observer what happened to the economy and the banking sector? C.E.A.: Cyprus was driven out of the international markets in 2011 so someone who was following such developments would not have been surprised by the request for financial assistance. A variety of factors led to our demise, including the effects of the global financial crisis, our exposure to the Greek bonds and their ‘haircut’, the overexposure of Cypriot banks in foreign markets, uncontrolled public spending and more. We were, unfortunately, reluctant to take the necessary measures and radical action sooner. If we had done so, we could potentially have avoided the severity of the Eurogroup’s deal and bailout that has crippled our economy and banking system. We are going through a rough patch and it is no secret that anydecisions taken will be painful with long-term repercussions. However, we have an opportunity to change the way we do things and how we operate. Let’s not miss the opportunity to analyze our mistakes and take corrective action that will have a longstanding impact on the country’s growth. Gold: How optimistic/pessimistic are you about the Country’s short-term and longterm prospects? �� C.E.A.: I have always been an optimistic person. We are definitely going to go through a difficult transition period over the next few years and we will suffer but we will prevail for sure. We need to focus on measures that will improve our business environment now and in the future. The government is focusing on measures to boost the economy, create new jobs and attract foreign investment. At the same time, the government will become more efficient with less bureaucracy and cultivate the necessary customer-friendly approach to attract and retain investors. We finally have an opportunity to restructure and implement reforms that are long overdue. With hard work we will get back on our feet and become even stronger. And once we start to profit from our hydrocarbons discovery, Cyprus has the true potential to become one of the richest per capita countries in Europe. 38 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS main_story2_angastiniotis2.indd 38 11/06/2013 10:19

Gold Magazine June - July 2013, Issue 27 | Page 40